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Great News for First-Time Buyers: FHA Loans Just Got More Affordable!
February 24, 2023
If you’ve been thinking about buying your first home this year, we just got some great news that will make a popular loan for new buyers more affordable.
In fact, those who take out FHA loans (a common loan program among first-time buyers that’s backed by the Federal Housing Administration) will save about $800 on average annually, according to a White House release.
The savings comes not from lower interest rates or a dip in fees (although those would be nice, too!), but the discount will be due to a drop in mortgage insurance premiums for FHA loans.
As mandated by HUD, the mortgage insurance that’s required for almost all FHA loans will be reduced from 0.85% to 0.55% for borrowers.
The lower mortgage insurance premiums (MIP) will go into effect as of March 20 of 2023, and beyond.
And according to White House estimates for the average FHA borrower, that reduction in MIP will save about $800 per year.
FHA loans are particularly attractive for first-time buyers for a variety of reasons.
Chief among them, FHA loans may require lower down payments, typically only 3.5% of the purchase price. Credit standards are also more flexible with FHA loans, and down payments or funds to close may be gifted.
There are other benefits to FHA loans that make it an ideal loan for buyers to purchase their first home, and that could be why almost 84% of FHA mortgages are issued to first-time buyers. That’s pretty incredible when you think about it – more than 8 out of 10 FHA loans go to first-time buyers!
And HUD and the White House press release point out that this improvement in affordability will especially help lower-income buyers and minority buyers.
"For this country to truly succeed, all Americans must have access to opportunity. That means expanding access to wealth-building and home ownership," said Marcia L. Fudge, HUD Secretary.
"Today, we are building on the steps we've taken to make homeownership more affordable, and HUD is acting to ensure people feel comfortable purchasing a home as they build toward their future. As we reduce housing costs for people with FHA mortgages, we continue our work to address longstanding disparities in homeownership."
But there are some hoops to jump through and drawbacks to FHA loans, including the necessity to pay mortgage insurance (if you come in with a low down payment when buying). And those mortgage insurance premiums are relatively sizable, including 1.75% of the loan amount in upfront mortgage insurance as well as about 0.85% in annual mortgage insurance premiums.
That MIP is broken down monthly and included in their total monthly mortgage payment. But, as of March 20, most mortgage borrowers who take out FHA loans will only pay 0.55% in mortgage insurance premiums, a welcome savings!
If you’re considering buying your first home this year – or would like to be connected with one or two of the great mortgage brokers we know, please contact us here.
A lot of my clients are from San Francisco and the Bay Area but are now interested in relocating to Sacramento. Whether you’re thinking about cashing out by selling your home in the Bay and living an easier, slower (and more affordable) life in Sacramento or are looking to invest in real estate, Sacramento is a great option! Here are eight reasons why. 1. Parking, Traffic, and Flat Streets In Sacramento, you won’t have to look for street parking nearly as long, and your daily commute will probably be much shorter (although we still complain about the traffic here). By the way, the streets are mostly flat in Sacramento, which will probably be a welcome change from the Bay! 2. Lower Cost of Living The cost of living is much lower in Sacramento, a fact you’ll sure enjoy. By current estimates, the average monthly cost of living for a family is only $5,368, compared to approximately a million dollars in the Bay Area (rough math!). In general, the cost of living in the Bay Area is 57% higher than in the capital city of California and making $100k in Sac is like earning $200k+ in San Francisco! And we’ll talk about home prices in Sacramento down the list. 3. Small Town Feel, But Big City Sacramento still has all of the amenities and what you want in a big city, but a more laid-back, smaller city vibe, making for a great combination. From parks to pro sports to great healthcare and more, Sacramento checks all the boxes – without being too big, impersonal, or intimidating. 4. Kings and Sports Sure, we don’t have a pro baseball team in Sacramento. (But isn’t one of yours moving to Las Vegas? Ouch! Too soon?) But we do have a great NBA franchise with a diehard fanbase, a pro soccer team, minor league baseball and hockey, and a whole lot more sporting events! 5. Proximity to Lake Tahoe…and More Downtown Sacramento is only 104 miles from Lake Tahoe, close proximity for all of those skiers, snowboarders, hikers, and mountain lovers who want to get “up the hill” for a weekend. And by the way, we’re also just a stone’s throw from the Bay Area or even Napa Valley – bonus! 6. Outdoor Activities The outdoor fun doesn’t end with Lake Tahoe, as there are endless rivers, lakes, hiking trails, camping spots, and hilly vistas within the Sacramento region or nearby Placer County. For those who like to cycle, run, or just take a relaxing walk, Sacramento features dozens of miles of trails, including the popular Sacramento River Parkway Trail, Yolo Causeway Bike Path, American River Trail, Lake Natoma Trail, and many more! 7. Art, Fairs, Festivals, Concerts Transplants from the Bay Area definitely won’t be left with nothing on their social calendars, as there’s a myriad of fairs, festivals, concerts in the park, Art Walk Saturdays, and other events to choose from. Sacramento also has a somewhat-underappreciated restaurant scene, with some countless great venues and eateries, from fancy to food trucks and everything in between – including dazzlingly delicious ethnic food. And when you do want to get out of town for that quick LA, ‘Vegas, or even Mexico long weekend, Sacramento’s airport is super easy and convenient! 8. Home Prices We saved the best for last, as the real estate market in Sacramento is way (or way, way, way) more affordable than buying a home in San Francisco or the Bay. With the median home sale value now around $463,828 compared to a median of $1.3 million in San Francisco. Once you get over the pleasant shock of how favorable the real estate market is in Sacramento, consider also that a million dollars will get you a mansion (literally!) with plenty of property in Sactown, while you’ll have a nice, big, comfy…closet in SF. Sacramento is also a fantastic place to invest in real estate. With an abundance of universities and colleges, medical centers, conventions and events, and the aforementioned airport, it’s a perfect place to buy a home, condo, or townhouse and Airbnb it. Sacramento also offers a host of duplexes and other multi-family housing units for savvy investors. *** So, when you’re ready to make the move or just invest in real estate in Sacramento, I’d love to show you around and I’m always here to help!
If you’ve sold a home in recent years in the Sacramento region, you’ve probably felt like you were in the driver’s seat, with buyers flocking to your listing and lining up to submit an over-offer bid. But that’s not always the case, and sellers have certain challenges and obstacles in more normalized markets. Even now, in this a-typical market, defined by a listing inventory shortage and high demand BUT higher interest rates, there are certain pitfalls for sellers who do not pay attention (or listen to their Realtor!). So, no matter if it’s a buyer’s market, a seller’s market, or our current screwball market, I wanted to offer these 10 challenges to navigate while you list your home for sale. 1. Understanding Local Market Conditions: Before we put a For Sale sign in your front yard, it is crucial to assess our local real estate market conditions. That goes not only for macro trends and the Sacramento region, but your individual area, neighborhood, and even street! Whether it's a buyer's market, a seller's market, or a balanced market, understanding the trends, what’s selling, and how fast will help you set realistic expectations when determining a pricing strategy. 2. Timing the Sale: The timing of your home sale can significantly impact its success. Different markets have different peak seasons for selling properties. And remember that you never want to call me to get started with your home sale when you’re ready to sell, but 3-6 months before you’re ready for it to close! 3. Managing Your Emotions: When it comes to managing huge investments ourselves, we all fall victim to emotions and clouded judgment. Of course, that’s why I’m here to help you as an experienced Realtor. Remember that selling a home is a business decision, and keeping emotions in check can help you make rational choices and navigate the challenges more effectively. 4. Pricing Your Home: Determining the right price for your property is a science that requires experience and expertise. Overpricing can lead to extended listing periods and deter potential buyers, while underpricing can result in missed opportunities for maximizing your sale price. But don’t worry – my job is to present the most accurate and current market data to show you a realistic range of where your home to be priced. 5. Preparing Your Home for Sale: There’s still a lot of work to be done before we make your listing live on the MLS and start fielding buyers and offers. The includes a walk-through where I’ll look at your home’s condition and design with a critical eye, letting you know what repairs, minor renovations, cosmetic fixes, or even staging I recommend. Taking these steps will vastly increase the perceived value of your home with buyers, optimizing your chances or putting as much money in your pocket as possible! 6. Maintaining A "Show-Ready" Home: It’s not enough to repair and fix up your home before listing, but you should maintain it in “show-ready” condition throughout the home sale proves. So, start de-cluttering, de-personalizing, clean out closets and things you don’t need for storage, and make sure that your pets (or their hair/odors etc.) aren’t turning off potential buyers. 7. Negotiations: Every single home sale entails some level negotiations (or you’re not doing it right!). We may receive low-ball offers, strange requests, and even last-minute conditions along the way, but rest assured that my job is to guide you through those negotiations, communicating productively with the buyer’s Realtor and ensuring you have the best possible outcome – and the most money in your pocket. 8. Navigating Inspections: Buyers will conduct various inspections as part of the due diligence process., most notably the home inspection These inspections can uncover issues that may impact the sale and the final price. By considering a pre-listing inspection, you can identify and address potential problems proactively, minimizing surprises and increasing the chances of a smooth transaction. 9. Satisfying Bank Appraisals: Even if you list your home for sale at a “pie in the sky” price and some billionaire falls from the sky and wants to pay that price, the bank will still need to sign off (as long as that billionaire needs a home loan!). That means an appraisal where a neutral third-party professional needs to certify that the value is there to justify that price. 10. Choosing the Right Realtor – Rico Rivera! For many of us, selling a home will be the biggest financial decision of our lives. It should also be the most lucrative! So, don’t leave your home sale to chance or rely on inexperienced or part-time agents. Instead, Rico River is a local expert in the Sacramento market with decades of real estate experience and an impeccable reputation in the industry. Contact Rico if you have questions about selling or just would like to know what your home is worth in today’s market!
Let’s be real - when it comes to selling your home, every single homeowner has one main goal: to end up with as much money in their pocket as possible. And I completely understand, as a home is possibly the largest investment you’ll ever make for your family, and maximizing returns is what investing is all about! So, when coaching homeowners before the sale, I often get questions about what items they should fix, repair, or improve before listing their property. It’s a great question, as the last thing you want to do is invest thousands of dollars into a home repair (and deal with a lot of time, mess, hassle, etc.) only to not recoup that money once buyers start writing offers. But the good news is that the right fixes and improvements can significantly enhance your home’s value. Don’t forget that an increase in value may show up in two ways: by being far more attractive to buyers (bringing in more people, showings, offers, etc.) and, of course, a higher purchase price that lands more money in your pocket. So, which home improvements will actually yield the best results for sellers? We can turn to data from the 2022 Remodeling Impact Report released by the National Association of Realtors, which outlines the cost recovery for popular interior remodeling projects: 147% Refinishing Hardwood Floors 118% Installing New Wood Flooring 100% Upgrading Insulation 86% Converting Basement to A Living Area 83% Renovating Closets 75% Converting Attic to Living Area 71% Bathroom Renovation 67% Kitchen Upgrade 63% Adding A New Bathroom 56% Add New Bedroom Suite But remember that those projects are just inside your home and entail spending big bucks in hopes for a huge return. That’s a huge risk to take, especially when it also involves weeks or months to finish the work, a huge cost upfront, and hopes that the market doesn’t change or decline. Most homeowners may not need (or want) some of those big repairs or improvements, so what are some smaller (and less expensive) fixes that can boost your ROI when selling? 1. Curb Appeal: First impressions matter and improving your home's curb appeal can make a substantial difference. According to the National Association of Realtors (NAR), landscaping improvements yield an average ROI of 100-200%. Enhance your home's exterior by ensuring a well-maintained lawn, fresh paint, clean windows, and a welcoming entryway. 2. Bathroom Updates: Buyers pay close attention to bathrooms, so it's crucial to ensure they are in good condition. And you don’t always need to do a major overhaul - simple updates, such as regrouting tiles, replacing fixtures, and adding fresh caulking, can go a long way. Bathroom remodels typically provide an ROI of 70-80%. 3. Energy-Efficient Improvements: Energy efficiency is increasingly important to homebuyers. Consider upgrading insulation, replacing old windows with energy-efficient ones, and installing programmable thermostats. These improvements not only reduce energy costs but also provide a competitive advantage, with an ROI ranging from 50-70%. 4. Minor Interior Renovations: Minor interior renovations can freshen up your home's appearance without breaking the bank. Focus on painting walls with neutral colors, replacing worn-out flooring, and updating light fixtures. These updates have a high ROI, typically ranging from 50-70%. 5. Smart Home Technology: Investing in smart home technology can give your property a modern edge. Consider installing smart thermostats, security systems, and lighting controls. These upgrades offer convenience and can attract tech-savvy buyers, with an ROI of around 50%. 6. Exterior Improvements: Alongside curb appeal, exterior improvements such as deck additions, patio upgrades, and the addition of outdoor living spaces can increase your home's value. These improvements have an ROI of approximately 50-60%, providing buyers with additional usable square footage. Trying installing a hanging/swing seat on your front porch or back patio and watch the offers come in! 7. Cosmetic Enhancements: Do not overlook the power of small cosmetic enhancements. Simple fixes, such as replacing outdated hardware, refreshing paint, or upgrading lighting fixtures, can give your home a polished look. These improvements are cost-effective and can provide an ROI of 40-50%. 8. Home Staging: Finally, invest in professional home staging to showcase your property's best features and create an appealing ambiance. Staged homes tend to sell faster and at higher prices, with an average ROI of 200-300%. While this is a general guide, please remember that not all homes or situations are the same. Your neighborhood, price level, competition, timing, etc. will all impact what you should or shouldn’t fix up around the house to maximize profit. So, give me a call when you’re thinking about selling so we can walk through and come up with the best strategy, or if you’d just like to know what your home is worth in today’s market!
As a Realtor in Northern California, it’s my job to understand not only current market conditions but rising demographic and economic trends that will affect our housing market long-term. So, today I wanted to talk about the rise of Hispanic and Latino homeowners and how that trend will continue to evolve in Sacramento, NorCal, and the nation. While the Hispanic and Latino population is growing rapidly, their interest in homeownership is growing even faster. In fact, according to the National Association of Hispanic Real Estate Professionals (NAHREP), Hispanic homeownership rates have been rising faster than any other demographic group over the last decade. In 2022 alone, 349,000 homes were purchased by Hispanic owners, which increased their homeownership rate to a record-high 48.6 percent, benefiting from eight straight years of growth. Latinos are also utilizing FHA loans and traditional mortgages more than ever, fully embracing all of the lending options available to them. In fact, Latino use of mortgages when buying a home has increased by 42 percent since just 2018. One of the primary reasons for this trend is that Latinos place a high value on homeownership as a means of building wealth and establishing roots in their communities. In a recent survey by NAHREP, 87% of Hispanic respondents said that owning a home is a good way to build wealth, and 91% said that homeownership is part of achieving the American Dream. Owning a home provides a sense of stability, community, and putting down roots. That’s particularly important for Hispanics, who are more likely to live in multigenerational households and place a high value on family and community participation. In fact, Hispanic buyers purchase multi-unit properties (like duplexes, etc.) at a higher pace than other buyers. There’s also huge buying power among the Hispanic population in the U.S., with higher participation in the workforce than any other racial or ethnic group and an emphasis on upward mobility. In fact, one in five Latinos is currently now in college, university, or trade school, a fact that empowers homeownership. According to the Federal Reserve, the median net worth of Hispanic homeowners is almost six times higher than that of Hispanic renters. This is because homeownership provides an opportunity to build equity, which can be used to pay for education, start a business, or retire comfortably. Latino and Hispanic homeownership also favors younger buyers. Data points to the trend of younger homeowners from that demographic as compared to all racial groups. According to the Urban Institute, Hispanic homeownership rates are projected to continue to grow over the next decade, with the greatest homeownership increases expected among younger generations of Latinos. Between 2020 and 2040, 70 percent of the homeownership growth from minority households is expected to come from Latinos homeowners, a vast majority. But there are still obstacles and challenges to homeownership among that demographic. One of the biggest obstacles is access to credit. Hispanics are more likely to have lower credit scores and be turned down for mortgages compared to other groups. Another obstacle is the lack of affordable housing options in many areas. Hispanic households are more likely to be cost-burdened, meaning that they spend more than 30% of their income on housing expenses. This can make it difficult to save for a down payment and qualify for a mortgage. Finally, there is a lack of education and outreach on the part of real estate professionals and lenders when it comes to serving Hispanic clients. Many Hispanics may not be familiar with the home-buying process or the available financing options, which can make it difficult to navigate the system. Yet despite these challenges, unprecedented opportunities for growth and wealth generation abound among U.S. Latinos and Hispanics, which will continue to strengthen their contributions to the very fabric of America. As a Latino myself, I’m passionate about helping others achieve the dream of homeownership as well as making wise financial decisions when selling. So, contact me if you have any questions about buying or selling in Sacramento or just need more advice.
To sell or not to sell, that is the question. Homeowners have a critical choice this summer and the remainder of 2023, as they’re faced with a series of unprecedented market and economic conditions. From non-ideal mortgage rates to low supply and the possibility of a looming recession, there is no perfect roadmap for where the housing market may go next. But one thing is for sure: Sacramento homeowners are sitting on record equity after nearly a decade of hot home price growth, and they’re wise to think about listing it for sale to cash in. So, here are 5 considerations when thinking about selling this summer: 1. Equity Like we mentioned, homeowners are sitting on a mountain of equity. Especially in Sacramento, we’re seeing record value in our homes above what we owe. Even if you bought just a few years ago, you’re probably sitting pretty. However, prices have dropped in 2023 and there is the possibility that they’ll drop more. The market is already trending in that direction and that could especially be true if we face greater economic troubles. So, how can you cash in? Sell! And if it’s your personal residence, you have some amazing tax benefits to selling and pocketing a bundle, too! 2. Seasonal Uptick Most years, there’s an uptick in busy buyers, sales volume, and motivated sellers around the spring, summer, and early fall. And even though this market is a unicorn of sorts, we’re seeing that seasonal uptick now. So, the overall trend may be that prices are dropping and the market has cooled, but you may have a small window to sell your home this summer or during 2023 and maximize profits. 3. Low Inventory When people talk about this housing market, they often mention mortgage rates first. However, there’s probably another factor that’s dominating our housing conditions even more: low inventory. In fact, the number of available homes for sale is just about at all-time lows, and that shortage is even more profound among modest home prices in Sacramento. So, conditions are perfect for homeowners to list their home for sale and cash in. But wait too long and that may change in a big way. Once homeowners realize that values are dropping, equity is dwindling, AND the economy is turning for the worse, there will be a huge wave of people who want to (and need to) sell their homes. That means more competition – and probably lower prices – for you. 4. Strong Demand While supply may be paltry, supply is still strong – particularly in the Sacramento region. The city continues to grow by leaps and bounds, more and more people are moving to the capital of California, and even Bay Area investors and buyers abound. Based on the typical household income in Sacramento, there’s even more of a pressing need in the modest price range of under $500k or so. Add to that trend the huge number of potential buyers who put their plans on hold because of Covid and/or need to buy again because of post-Covid lifestyle (like returning to the office), and there’s still a very strong demand among buyers, despite lukewarm mortgage rates. 5. The Economy Homeowners may be in a great position, but our overall economy may bet teetering on a cliff. Economists predict a recession in 2023 or 2024, which could range anywhere from mild and short-term to catastrophic and lasting years. Looking at job losses, a massive wave of maxed out credit cards, banking failures and more should be enough to scare homeowners into selling now out of security – cashing in their sizable profits before it’s too late. *** So, if you bought a home a few years ago and have been quietly pondering if it’s a good time to sell or not, please take a hard look at these factors before making your decision. And the easiest way to get some sound advice is just to contact us for a detailed market analysis to determine what your home is worth and pencil out what a home sale (and subsequent purchase) would look like!
There’s no doubt that the market is showing early signs of shifting, with buyers poking their heads out after a mortgage-rate driven hibernation and sellers looking to cash in on record equity this spring and summer. But that doesn’t mean house hunters are without serious reservations, some of them warranted and some just based on perception or misinformation. To that point, I saw a poll recently from a national real estate website that uncovered the top consumer concerns when it comes to buying a home these days. To start with, consider that 10% of those polled had no major concerns. (Super, give me a call immediately and we can go out house hunting!) Also, 5% had “Other” concerns, like if the back porch was big enough for a jacuzzi and if the neighbors would blast music at 3am. In order of least prevalent to most, here are the remaining top homebuyer concerns in this market: These are merely passing reservations: 3% The homebuying process is confusing or discouraging. 3% I’m worried about my job security or the economy. 3% I’m afraid that I might have trouble getting a home loan. Now, we get into the slightly more pressing concerns: 5% Mortgage rates might go up again before I get the chance to buy! 6% I might not have enough money saved for a down payment. 8% I need to sell my home first before I can buy! Next up are the real serious issues, with more than 1 in 10 potential buyers reporting these concerns: 14% Lack of inventory – there aren’t enough homes to choose from. 17% There’s too much competition from other buyers – I don’t want to get into a bidding war! And finally, the single most reported concern in this poll of homebuyers, with almost 3 in 10 having this challenge: 27% I have concerns around affordability – home prices and mortgage rates are either too high or may be on the rise. Do you want to buy but have some of these concerns, too? I’m talking to a whole lot of current homeowners who are sitting on a treasure chest of equity after years and years of a hot housing market. They realize that now is the time to sell and cash in, but they have some reservations about being a buyer in this market, too. But I assure you that no matter what trepidation or concern you’re feeling, the best thing to do is to sit down and go through it together, talking facts and stats – not general fears. Together with a great mortgage lender (I can recommend a few) we can pencil out the different scenarios of selling your home, what proceeds you’ll pocket, and what the home purchase may look like. I think you’ll find that, while legitimate, most of these concerns are merely hurdles – not stop signs – on the way to buying a home and making the best financial decision of your life!
Right now, Sacramento’s housing market is seeing somewhat of a revival, far earlier than recession forecasters and market crash doomsayers could even imagine. Just like our beloved Sacramento Kings, the upstart Sactown housing market is upsetting expectations. Despite mortgage rates that nearly doubled from early 2022 to 2023 (but seriously, rates are pretty good again!), the national narrative of a housing market meltdown with huge price reductions just hasn’t come to fruition in California’s capital city. In fact, we’re starting to see early signs of a market rebound, with far more competition among buyers, multiple offers (on listings priced correctly), and even bidding wars once again! There’s one huge reason for the relative health of our market – inventory. Or, more accurately, a lack of housing inventory. In fact, the supply of homes for sale is now down to one month or less, an unparalleled shortage of available listings. That – more than prices and mortgage rates – dictates the health and positivity of a housing market in the long-term, so today I wanted to touch on seven factors that are contributing to our historic housing shortage. 1. Paltry New Home Construction For several years, new home builders didn’t focus on residential projects in the Sacramento region, or chose to build apartments and other commercial units, not residential homes. 2. Rapidly G rowing Region Sacramento has seen positive population growth in large numbers, with more and more people choosing to move to the capital city of California for its stable, diverse economy, wonderful quality of life, and lower cost of living. More people mean more housing demand! 3. High H ousing Demand! As the seat of California’s government and home to plenty of universities and new businesses, Sacramento is enjoying somewhat of a renaissance. Many people who move to our city want to buy (and have the funds to do so), which increases demand. 4. Bay Area B uyers are Flocking Whether they’re looking to invest in rentals, move to Sacramento and plant roots, or do some sort of hybrid commute, there are still plenty of buyers from the Bay Area that are gobbling up new listings, decreasing inventory. 5. We still have P ent-Up Demand from Covid We’re hearing less and less about Covid these days (thank goodness!) but one lingering effect is what it did to our housing market. There are still plenty of buyers who were working from home, didn’t want to buy or sell during Covid, etc. who are now ready to get out there and purchase a home, built-up demand has depleted our listing inventory even more! 6. There are P lenty of Mortgage Rate Refugees I coined the term “mortgage rate refugees” to describe all of those people who would LOVE to sell their home (and cash in on record equity), but they don’t want to jeopardize their low mortgage rate. While it’s tempting to hold onto that great rate in the low to mid 2’s, these folks should be in the game – not on the sidelines, which will only add much-needed inventory to our housing market. 7. People are R eluctant to Move And our final reason why inventory is so low is closely related to that last point. There are plenty of people I talk to who are eager to sell and make a big profit after years of hot home appreciation, but they’re reluctant to do so because they’re worried about what home they can buy next. The “But where will we move next?” homeowners who normally would be racing to list their homes are only dropping our inventory levels even more. *** So, what does this mean for you? If you’re a homeowner right now, I highly recommend you contact me to talk about your options. Listing your home for sale this spring or summer in Sacramento means you have a HUGE competitive advantage – the stark lack of listing inventory. Smart sellers can cash-in on record equity (before it starts disappearing), create a buzz and even bidding war, and have PLENTY of means to buy their dream home in today’s market. Contact me for more information or to see what your house is worth today!
“Gentleman (and ladies), start your engines! Three-Two-One…GO!” That may sound like the start of every Indy 500 or NASCAR race, but it also rings true for the Sacramento housing market this spring. After a pronounced slowdown and 45% lower sales volume due to elevated interest rates, mortgage rates are starting to come down and buyers and sellers are getting active again. In Sacramento, we’re already seeing far more buyers, more new listings, and even multiple offers and bidding wars again! Of course, I’m making a comparison to what our hibernating housing market has looked like for the past six months or so – not trying to say it’s back to early 2022 (ludicrously hot) levels. But it does feel like we’re at the starting line of another hot real estate market for the spring and summer! Here are a few reasons why now may be the BEST time to get a head start on the competition and list your home for sale or go out house hunting right now: 1. Rates are Dropping After experiencing one of the sharpest climbs for mortgage rates in history, rates for home loans have actually changed course and declined steadily over the last month or two. Rates may not be at all-time lows, but they are way below historical averages and a lot closer to the 5’s than the 7’s right now. 2. The Seasonal Uptick Every spring and summer, the housing market sees an uptick in activity – and sometimes profoundly so. As the weather is warmer, days are longer, and the kids are out of school (or close to it), everyone is far more eager to buy or sell, and this year looks to be no different. 3. The Market has Absorbed Fed Rate Increases Mortgage rate increases were in large part due to the Fed’s campaign to raise their benchmark rate in an effort to combat inflation. Now, inflation looks like it has just about peaked, and the Fed is ready to pause rate hikes. But the good news is that the market and mortgage landscape has already absorbed the risk and reality of higher rates early on, so we’ll probably see mortgage rates keep dropping! 4. Home Prices have Come Back Down to Earth Let me put it this way – those who are waiting for the market to “crash” so they can pick up a home on the cheap will be waiting (and still renting) forever. But those who are looking for a 5-10% discount (or even more) on home prices compared to the peak last year are in luck this spring and summer. But be warned that continuing to wait means that you’ll probably miss out! 5. Supply vs Demand While many are focusing on mortgage rates or home prices, the real narrative of this housing market is the lack of inventory. In fact, housing supply is at scary-low levels, especially in Sacramento and other parts of CA. With strong and pent-up demand from homebuyers, the number of people eager to buy simply far outweighs the number of homes for sale – a recipe for a warming market. *** These are just 5 of the reasons we’re at the starting line of another hot housing market in Sacramento – and why you should call me about listing your home for top-dollar today!
As a homeowner, you want to ensure that your castle is not only a comfortable and safe space for your family, but the best investment you’ve ever made. The good news is that whether you're planning to sell in the future or just want to one-up your neighbor, there are certain factors that can increase your home's value. Today, I’ll break down some of the key factors for you today, and you can read about the factors to actually avoid – that will sink your home’s value – in our past blog here. https://www.siliconeastrealestate.com/10-things-in-the-neighborhood-that-will-sink-your-homes-value Here are 10 factors that can increase a home's value, backed by some relevant statistics: 1. Location, Location, and Location! Homes located in desirable neighborhoods with good schools and low crime rates will always be more valuable. According to Zillow, homes in the top-rated school districts sell for an average of 49% more than those in lower-rated districts! Furthermore, proximity to amenities like shopping, restaurants, and entertainment usually add more valuable. 2. Size and Layout: Larger homes with more bedrooms and bathrooms generally command higher prices. According to HomeAdvisor, each additional bedroom can increase a home's value by 4-5%, while each additional bathroom can add 20%. If you grew up in a big family with only one bathroom, you know this is true! 3. Upgrades and Renovations: Homes that have been upgraded or renovated, particularly in high-traffic areas like kitchens and bathrooms, can increase in value. According to Remodeling Magazine, a minor kitchen remodel can have a return on investment of over 70%, while a major kitchen remodel can have an ROI of nearly 60%. 4. Curb Appeal: A well-maintained and attractive exterior can increase a home's value. So, this weekend, plant those flowers, trim those bushes, and paint that front door! According to a study by the National Association of Realtors, homes with good curb appeal sell for an average of 7% more than similar homes without it. That’s a huge bump! 5. Energy Efficiency: Homes that are energy-efficient, with features like double-paned windows, insulation, and energy-efficient appliances, can raise your appraised value. According to the National Association of Home Builders, buyers are willing to pay an average of $8,728 more for a home that saves $1,000 a year on energy costs! 6. Outdoor Living Spaces: When the weather is good in Sacramento (and the allergies not too bad), there’s nothing better than taking the family outside to enjoy your yard or patio. Homes with outdoor living spaces like decks, patios, and porches can add up to 12% to a home's value if they’re done right. 7. Plenty of Storage: There’s nothing worse than running out of closet space or having an overly cluttered garage. Homes with ample storage, including closets, pantries, and garages, can be more valuable. According to a survey by the National Association of Home Builders, 92% of buyers want a laundry room, 86% want a walk-in pantry, and 80% want a garage. (And most guys want a three-car garage!) 8. Smart Home Technology: These days, smart homes are very desirable with buyers. According to one recent survey, 81% of buyers are more likely to buy a home with smart home technology. So, houses equipped with smart home technology like thermostats, security systems, and lighting, can be more valuable. 9. Historical or Architectural Significance: Homes with historical or architectural significance, like those in historic districts of downtown Sacramento, can be more valuable. According to a study by the National Trust for Historic Preservation, homes in historic districts appreciate an average of 5% more per year than those outside them. 10. Great Views: Homes with desirable views, like those of the ocean (ok, or river in Sactown!), mountains, or city skyline can be more valuable. According to a study by Redfin, homes with water views sell for an average of 78% more than those without them. These factors are a general guide, but every home, every neighborhood, and every housing market is different. For instance, over-improving – like adding a 2,000 square foot addition when all other homes in your neighborhood are only 1,200 square feet – can actually drop your value, comparatively. So, before you swing a hammer or start spending your hard-earned dollars, please give me a call. We can talk about your home and see what factors may be appropriate to add or change, and how that will increase your sale’s price. And when it’s time to buy a home, of course I’ll make sure to look out for you!
I remember when I bought my very first home, a little 1950s two-bedroom fixer in the Arden area. I closed and got my keys on a Friday and had ambitious plans for the first weekend in the property. My To Do list included redoing the hardwood floors, repainting the bedrooms, changing out the toilets and one sink, and starting to clean out the garage. Of course, I took on WAY too much, was completely overwhelmed, and made it as far as Home Depot before collapsing from exhaustion by Saturday morning. And that ambitious To Do list? It only took me six months or so to complete – not one weekend. So, if you recently bought a home – maybe for the very first time – you may have a long To Do list for improvements and maintenance, too. I certainly respect anyone who wants to roll up their sleeves and become a DIY weekend warrior (and save money). But I highly recommend you get organized and start with essential maintenance, working your way to bigger, more fun projects from there. So, no matter if you just bought your first home or moved up to your dream home after many decades as a homeowner, this home maintenance checklist by season will help: Spring Spring is the perfect time to get outside in the Sacramento area, check for any damage from heavy rains, and take care of your home's maintenance needs. Here are some tasks to consider: Inspect Your Roof: Check your roof for any damage caused by winter storms or harsh weather. Look for missing or damaged shingles, cracks in flashing or gutters, or leaks. Clean Gutters and Downspouts: Clean out any debris that accumulated in the gutters over the winter to ensure proper drainage. Service your HVAC System: Hire a professional to inspect and service your HVAC system before the summer heat arrives. This is huge since your AC will always break down during the hottest period of the summer! Check Windows and Doors: Look for any gaps or cracks around windows and doors and repair them as needed to ensure energy efficiency. Fertilize your Lawn: Fertilize your lawn to promote healthy growth and prevent weeds. Summer Summer brings plenty of sunshine and heat in Sactown, so here are some maintenance items to consider: Check for Pests: Inspect your home for pests such as ants, termites, and rodents. Address any infestations promptly. Inspect and Clean Outdoor Appliances: Clean and inspect outdoor appliances such as grills and air conditioning units to make sure they're functioning properly. Clean and Seal your Deck or Patio: Clean and seal your deck or patio to prevent damage and keep it looking its best. Check your Irrigation System: Inspect your irrigation system for leaks and make any necessary repairs. Clean your Windows: Clean your windows inside and out for clear views and improved energy efficiency. Fall Fall is actually my favorite time in NorCal, and it’s also the time to prepare your home for winter. Here are some tasks to consider: Check for Drafts: Inspect your home for drafts and seal any gaps or cracks around windows and doors. Clean and Store Outdoor Furniture: Clean and store outdoor furniture to prevent damage from the winter weather. Inspect your Chimney: Hire a professional to inspect your chimney and clean it if necessary to prevent fire hazards. Service your Heating System: Hire a professional to inspect and service your heating system before the cold weather arrives. Clean Gutters and Downspouts: Clean out any debris that's accumulated in the gutters to ensure proper drainage. Winter Plenty of rain and the rare freezing temps can be harsh on your home, but with the right maintenance, you can keep it in top shape. Here are some tasks to consider: Check your Roof for missing shingles, gutters, and rain flow. Actually go out and look when it's raining heavily to see if you spot any potential leaks on the roof or pooling water near your foundation. Look for Tree Branches that may be old, damaged, ready to fall, and too close to power lines, your roof, or the driveway. Insulate your Pipes: If you’re further up in the hills, you may get a few freezing mornings. So, insulate your pipes to prevent them from freezing and bursting. Check your Smoke Detectors: Test your smoke detectors and replace batteries if necessary to ensure they are functioning properly. Check for Drafts: Inspect your home for drafts and seal any gaps or cracks around windows and doors. Keeping up with your home’s maintenance needs can be overwhelming, but by organizing your tasks by season, you can make the process more manageable. Use this guide to ensure your home is always in top shape and ready for whatever weather or problems come your way!
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